Past Issues

BuckleySandler LLP’s InfoBytes Blog monitors and reports on news, legal developments and legislative actions affecting the financial services industry. With a focus on issues ranging from fair lending to consumer financial services regulation and the CFPB, InfoBytes Blog is a comprehensive and timely source for in-house counsel and industry executives to stay abreast of developments affecting their industry.

The United States Supreme Court on Wednesday resolved the long-standing circuit split on whether an offer to satisfy the named plaintiff’s individual claims is sufficient to render a case moot when the complaint seeks relief on behalf of the plaintiff and a class of similarly situated individuals. In a 6-3 decision authored by Justice Ginsburg, the Supreme Court held that an unaccepted settlement or Rule 68 offer cannot moot a class action. However, the Court refused to address and explicitly left open the question of whether its ruling would be different if a defendant deposited the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then entered judgment for the plaintiff in that amount. By leaving this question open, defendants in a position to unilaterally provide complete relief may still be able to “pick off” putative class representatives and avoid class action suits. Read more…

Recently, a legally blind plaintiff filed a class action complaint against a leading home improvement and construction products and services retailer alleging that the company violated state law and the American Disabilities Act (ADA) by denying blind individuals equal access to products, services, and opportunities offered on its website. Diaz v. Home Depot, Inc., No. 15-cv-09178 (S.D.N.Y. Nov. 20, 2015). The complaint asserts that the company’s website contains barriers that “make it impossible for blind users to even complete a transaction on the website . . . thus exclude[ing] the blind from the full and equal participation in the growing Internet economy that is increasingly a fundamental part of the common marketplace and daily living.” The complaint further alleges that the company chooses “to rely on an exclusively visual interface” despite having access to technology that could make the website more accessible, such as limiting the use of tables and javascript and making use of alternative text, descriptive links, and resizable text. The plaintiff seeks (i) a permanent injunction requiring the company to take the necessary steps to ensure its website fully complies with ADA requirements so that it is accessible and usable by blind individuals; and (ii) compensatory damages to the plaintiff and a proposed subclass of blind customers.

The lawsuit is one of a number filed in 2015 – including a November 6 complaint against the NBA – under the ADA against companies operating websites with alleged digital barriers preventing blind individuals from accessing the electronic marketplace. According to a DOJ statement regarding its regulatory plans, rulemaking initiatives regarding the accessibility of web information and services provided by public accommodations are not scheduled to be included in the agency’s long-term actions until fiscal years 2017 and 2018.

On August 24, the Ninth Circuit held that a title insurer’s equity investments in title agencies in exchange for agreements that the agencies would refer customers to the insurer violated the anti-kickback provisions of the Real Estate Settlement Procedures Act (RESPA). Edwards v. First Am. Corp., 2015 WL 4999329 (9th Cir. Aug. 24, 2015). In this long-running case (covered in InfoBytes here, here, here, and here), borrowers filed a putative class-action lawsuit against the title insurer claiming violations of Section 8 of RESPA, which prohibits payments for the referral of settlement service business. In prior phases of the litigation, courts declined to certify the class, and the U.S. Supreme Court eventually granted certiorari but declined to rule on the merits of the litigation. In this appeal, the plaintiff-borrowers asked the Ninth Circuit to review the district court’s most recent denial of class certification, and the CFPB filed an amicus brief in the appeal as well. The Ninth Circuit affirmed the denial of the certification, finding that common issues did not predominate over individual issues for the proposed class. The court further stated that, while RESPA exempts payments for “goods,” “facilities,” and “services” from Section 8’s prohibition on referral fees, the title insurer’s equity investments in the title agencies were not payments for “goods,” “facilities,” or “services.” Further, the court found that RESPA’s exemption from Section 8 available to affiliated business arrangements did not apply because no compensable services were performed by the title agencies in exchange for the payments and the title insurer did not receive any payments from the title agencies as a return on its ownership interests.

On August 3, a federal district court in New York dismissed with prejudice a securities class action suit filed against Chinese oil and gas company PetroChina Co. Ltd. The suit alleged that statements in the company’s 2011 and 2012 financial statements claiming the company was in compliance with its internal rules and securities regulations were false or misleading. The plaintiffs filed the suit after the Chinese government announced that it was investigating four of the company’s top executives for corruption.

The court dismissed the complaint in its entirety, finding that the plaintiffs failed to allege any acts of bribery or corruption that predated the filing of the 2011 and 2012 financial statements. The court wrote: “[T]his Court is not requiring that Plaintiffs allege a detailed account of the particular illicit deals that PetroChina officials were allegedly engaged in. Plaintiffs are required, nonetheless, to establish—at a bare minimum—that the underlying fraud took place during the time period covered by the purportedly false public statements and that someone at PetroChina knew or had reason to know about it.”

Similar class action suits against Wal-Mart and Avon have also been dismissed in the past year.

On June 12, the United States District Court for the Eastern District of California denied Castle & Cooke Mortgage’s motion to dismiss in a putative class action brought by affected borrowers stemming from Castle and Cooke’s 2013 settlement with the CFPB. The underlying complaint is based on the allegation that the “loan officer who sold plaintiff his mortgage loan was paid a bonus that was based, at least in part, on the fact that plaintiff received a more expensive and/or less favorable loan than he otherwise would have received.” The complaint seeks various remedies, including actual and statutory damages under the Truth in Lending Act. The complaint contains four separate causes of action: (i) violations of TILA, (ii) violations of the Utah Residential Mortgage Practices and Licensing Act, (iii) unjust enrichment under Utah law, and (iv) violations of the California Unfair Competition Law. Castle & Cooke only moved to dismiss the final two claims. In denying Castle & Cooke’s motion to dismiss, the court found that both challenged claims could be pursued, rejecting Castle & Cooke’s arguments that the claims were inappropriate given the remedies available under TILA. With this denial, the plaintiffs will be able to continue pursuing all four causes of action as the litigation continues.